Will EPA rules raise Orlando area's utilities bills?

The Obama administration is pressing for reductions of carbon dioxide from power plants, the largest source of greenhouse gas in the U.S. Florida utilities are divided in their response to the initiative.

The Obama administration is pressing for reductions of carbon dioxide from power plants, the largest source of greenhouse gas in the U.S. Florida utilities are divided in their response to the initiative.

Utilities this year are bracing for proposed cuts in emissions of carbon dioxide, a pollutant blamed for global warming. What it means for consumers — some say it could hike electric bills — is so far unclear.

The U.S. Environmental Protection Agency is targeting power plants that burn coal, oil and natural gas as the nation's largest source of carbon and wants states to submit pollution reduction-plans next year.

Reaction is divided sharply among Central Florida utilities.

Orlando Utilities Commission and Duke Energy object to what EPA calls its Clean Power Plan, saying it could trigger big increases in power bills.

But the company that owns the state's largest utility, Florida Power & Light Co., says it's ready for carbon reductions and backs EPA's initiative.

EPA wants utilities to generate more electricity with less pollution, harness carbon-free energy such as solar and wind, and promote conservation through more efficient homes and appliances.

CAPTION

The Great Recession is not quite forgotten in Central Florida, but 2015 is all about growth, and the Orlando area is a star in the state forecast for jobs.

The Great Recession is not quite forgotten in Central Florida, but 2015 is all about growth, and the Orlando area is a star in the state forecast for jobs.

CAPTION

Marco Santana tells us why economists say Central Florida could get even more crowded in 2015.

Marco Santana tells us why economists say Central Florida could get even more crowded in 2015.

Just how doable those demands are has been spelled out by utilities in their comments to state and federal regulators.

Of the three largest power providers in Central Florida, FPL has the lowest rate. It charges $99.57 for a home using 1,000 kilowatt-hours in a month, which is about average for consumption.

FPL's parent company, NextEra Energy Inc., touts itself as the nation's largest owner of electricity-generating wind turbines, and one of the largest solar-energy companies.

NextEra Energy, or NEE, also calls its Florida electric utility, FPL, one of the most efficient in the nation.

Serving 4.7 million customers in Florida, the Juno Beach-based power company relies extensively on new power plants, which use natural gas, and has the state's only two nuclear plants in operation.

"It is with this experience that NEE supports EPA's efforts," the company said.

NextEra Energy said FPL's modernization effort has left the company able to comply with EPA, but other utilities could struggle.

"It is not appropriate for FPL customers to subsidize other companies for their compliance costs," NextEra stated. "Our customers already have made the investments to achieve compliance."

Central Florida's largest utility is Duke Energy, which has about 560,000 customers in the Orlando area. It has the highest rate of the three utilities: A monthly bill for a Duke residential customer using 1,000 kilowatt-hours is $125.13.

Duke said EPA's plan requires a "very significant reduction in emissions that likely cannot be achieved." Attempting to do so, according to Duke, would be "unreasonably burdensome and potentially costly to Florida consumers."

The North Carolina-based utility said EPA's target for reducing customer consumption of electricity – through conservation measures such as better attic insulation and energy-stingy appliances – is too high to be achieved.

The "adoption of these measures ultimately is up to the customer, and neither the EPA, the state agencies, nor the utilities can mandate or force energy efficiency measures to be implemented," Duke said.

OUC owns two plants in east Orange County that use coal for fuel. Such power plants are blamed for the highest emissions of carbon pollution.

But the city utility said cutbacks in coal would be risky because it would further the state's heavy dependence on natural gas, which may shoot up in price.

Orlando's utility worries the EPA proposal could force the shutdown of one coal plant and limit use of the other. They would have to be replaced by an expensive plant that runs on natural gas and would take many years to build, OUC said.

OUC said EPA's proposed reduction of electricity usage through energy efficiency may be feasible, but isn't likely to be achieved because "60 percent of our residential customers live in rental units."

"These customers have no incentive to invest in the properties they don't own and the owners have no incentive to invest because they don't benefit from the reduced electric bill," OUC said.

The differences between Central Florida utilities are mirrored nationwide.

EPA's plan faces opposition from political conservatives and industry groups. For example, the American Coalition for Clean Coal Electricity argues the plan will cost jobs and do little to slow climate change.

Clean-energy advocates say the plan does not go far enough. "EPA's proposal can and should be strengthened," said the Natural Resources Defense Council.

EPA has received nearly 2 million written comments about its proposed and controversial Clean Power Plan. In Florida, environmentalists and FPL are largely supportive of the initiative. But most utilities and their advocates have many concerns, including Barry Moline, executive director of the Florida Municipal Electric Association.

"EPA's proposed Clean Power Plan will help reduce carbon dioxide emissions, but in the process will put Florida's electric system in peril, betting our future mostly on a single fuel, natural gas. Coal gives us 30 days of in-state fuel storage, while natural gas must be piped in soon after it is extracted. Giving up on coal is like removing the gas tank from your car and hoping there's a gas station every ten miles on the highway."

"Furthermore, the transition proposed by EPA is too fast, and will inflict a double financial whammy on Floridians. While we are paying for building new natural gas plants, we will still have mortgages to pay on the coal plants that will be shut down before the end of their useful life. This will cost Floridians billions of dollars in duplicate costs."